Personal Finance Budgeting: Major
Personal Budget Mistakes
In this article we are going to talk about some of the common
Personal Budgeting Mistakes that people make when writing and trying to
follow their personal budget. The following personal budgeting mistakes are
some of the most common ones that cause people to or quit on or fail on
their personal budget.
1) Not creating a personal budget
I decided to put this first because I know that some of you are still
thinking that you can get away with not writing out a personal budget for
yourself. You think that you can keep it all under control in your head and
you are wrong. This is the most important step in budgeting and it is sad
that most people do not even make it to this step. You cannot fail or
succeed in your quest for financial freedom if you do not try.
2) Being sure that you are adding correctly on your personal budgeting
worksheet
This is a somewhat dumb, yet common among budgeting mistake. Often people
make simple addition and subtraction mistakes and end up thinking that they
are spending $200 less than they actually are. It is always a good idea to
double check all of your budget numbers to make sure they are correct.
3) Lack of Consistency in Savings
People need to have a specific line on their budget worksheet that it
dedicated to tracking their monthly savings. After doing this people need to
establish a specific amount that they plan to save each month and then stick
to it.
4) Failing to establish an emergency fund for unexpected expenses
The majority of people do not realize that they need to have an emergency
savings funds to help in case unexpected expenses comes up. This money is
set aside in a savings account so that you don't have to deviate from your
budgeting plan if unexpected expenses come up.
5) Making only minimum payments on your credit cards
When people setup their budget they often only budget to make the minimum
payments on their credit cards. People need to do their best to allocate a
large amount of money toward credit cards payments each month so that they
can pay off their debts quicker.
6) Taking all the fun out of life by having a overly restrictive budget
plan
When you make your budget plan you need to plan for a portion of your
money to go to fun and entertaining activities. If you do not do this you
will find your plan to be to restrictive and will likely not follow it. You
can budget for this by cutting out some other expenses.
7) Spending more money than you make
This is often the biggest mistake in a personal budgeting plan. When
making your budget you need to make a plan where you are spending no more
than you make.
This is a short list of some of the major personal budgeting mistakes
that people commonly make. If you can avoid these mistakes it will greatly
increase your chances of being successful in your quest for financial
freedom.
By Jesse Chettle is a self-made Personal Financial Advising who
specializes in give out free personal financial advice over the
internet. You can visit his
Financial Advisorsblog to learn
more about
Personal Budgeting and Suze Orman
.
